Law Blog

Arizona Liquor Law Changes

As we head into the summer months in Arizona, I wanted to take a quick moment to remind everyone that a series of significant and important changes have been made to A.R.S. § 4-101 et seq affecting the liquor laws in the State of Arizona. Senate Bill 1460 was signed by Governor Brewer on April 19, 2011 and these new liquor laws will go into effect on July 20, 2011:

A.R.S. § 4-112 was amended by adding Subsections G.10 and 11 as follows:

Subsection Bnow requires any natural person (1 mile resident) who is in favor or opposed to the application with the right to file written arguments within 20 days of the date of posting, and now requires written arguments to contain:

If filed by a natural person on behalf of a corporation or other legal entity or association then the argument must be accompanied by:

1) A copy of the entity’s organizing documents;
2) The designation of the office or position the person holds with the organization; and
3) A copy of written appointment of the person to speak on behalf of the organization.

If written arguments are filed on behalf of a neighborhood association, block watch or other unincorporated association then the written arguments must be accompanied by letter of authority designating that person as spokesperson.

Subsection E [Is amended similar to Subsection B as it relates to filing a written protest[1] within 15 days of local government action or 60 days after filing the application with the director by a natural person (1 mile resident)] and now requires that the written argument contain:

If argument filed by a natural person on behalf of corporation or other legal entity the legal argument must be accompanied by:

1) A copy of the entity’s organizing documents;
2) A designation of the office or position that the person holds; and
3) A copy of the written appointment of the person to speak on behalf of the organization.

If filed by a neighborhood association, block watch or other unincorporated association written arguments must be accompanied by a letter of authority designating that person as spokesperson.

Allows the director to request the board to cancel a hearing if the reason for the protest is clearly removed or satisfied.

If, after hearing by the board, the license application has been approved and a formal order is not entered within 30 days, the decision is deemed entered on the 30th day after the hearing.

Subsection G[2] – Exempts a person-to-person transfer of transferable license (6, 7 and 9) at the same location and as provided in A.R.S. § 4-203, Subsection A (certain non-transferable licenses) from having to establish that the public convenience and best interestsof the community will be substantially served by the issuance of the license.

A.R.S. § 4-203Amends Subsections A, C, E. F. and L.

Subsection A – Is amended to exclude wholesaler, producer, government licensees in addition to club licenseesfrom establishing public convenience and best interestsof the community, and provides that applications for issuance of a non-transferable license, other than micro-brewery and domestic fine-winery licenses, for a location that on the date of the application has a valid license of the same series, then there is a “rebuttable presumption” that the public convenience and best interests of the community was established at the time the location was previously licensed, provided the presumption may be rebuttedby competent contrary evidence and shall not apply once the location has not been in use for more than 180 days. The presumption doesnot apply to the personal qualifications of the applicant.

Subsection C – Is amended to delete “bulk sale” and add “sale of the license” as a permissible person-to-person transfer of a series 6, 7 or 9 license.

Subsection E – Changes from15 to 30 days the time transferor must give notice ofassignments, surrender, transfer or sale of a liquor license to Department is required.

Subsection F – Changes from15 to 30 days the time acquiring party must give notice of acquisition of control to the Department.

Subsection K – Is amended to allow all Arizona licensees totransport spirituous liquor for themselves in vehicles owned, leased or rented by such licensee. Prior to amendment, only non-retail licensees could transport spirituous liquor for themselves. This Section does not impact Subsection J which allows a retail licensee to maintain a delivery service.

A.R.S. § 4-203.02Adds Subsections H, I and J.

Subsection H – Is added to allow wholesaler to donate directly to a special event licensee and must issue a net zero cost billing invoice in the name of the special event licensee. All limitations and requirements of Title 4 and its rules apply to the wholesaler and special event licensee.

Subsection I – Is added to allow wholesalers to temporally leave delivery vehicleand other items of equipment necessary for the sale and service of spirituous liquor on the special event premise one day before, during and one day after the event.

Subsection J – Is added to allow a wholesaler to leave spirituous liquor product at the special event if properly described on the preliminary billing invoice issued in the name of the off-sale retailer, which also names the special event licensee. The wholesaler has five days after the special event to make billing adjustments and issue a final billing invoice to the off-sale retailer and special event licensee.

A.R.S. § 4-205.02 Adds Subsection G which allows the director to charge a fee for site inspection before issuance of a restaurant license.

A.R.S. § 4-205.05 Amends Subsection A and adds Subsection B.

Subsection A – Is amended to change authority fromboard to director to issue temporary authorization to dispose at public auction seized liquor by the state, federal and political subdivision; allows director to dispose of seized liquor by providing it to law enforcement for training purposes only.

Subsection B – Is added to provide that liquor with an expiration date shall notbe offered for sale atpublic auction and must either be destroyed or disposed of as provided in A.R.S. § 4-205.05. The wholesaler that distributes the liquor brand in that territory may, but is not requiredto,accept a return of liquor at no cost for disposal or to be returned to the supplier.

A.R.S. § 4-205.06 Is amended to delete Subparagraph A.1 which previously prohibited hotels from giving minibar keys to guests between the hours of 1:00a.m.-6:00a.m.

Old Subsection A.4 is now Subsection A.3 – Is amended to change the hours of restocking minibars from between 1:00a.m. and 6:00a.m., to between 2:00a.m. and 6:00a.m.

Subsection B – Is amended to change reference from DES to the Office of Employment and Population Statistics within the Arizona Department of Administration.

Subsection F – Is amended to change the amount of liquor a series 6 or series 7 licensee may sell for off-premise use from 10% to 30%. Dual licenses issued or a second license at a single site, other than settlement licenses issued pursuant to Section 4 of House Bill 2002[4], have the burden of establishing public convenience and best interest in the community.

Subsection I – Is amended to correct statutory references to correspond to amendments to those statutes.

Subsection J – Is amended to allow series 10 licensees to apply for sampling privileges if the premises contain at least 5,000 sq. ft. and provides that until January 1, 2015, the director may charge a fee for processing sampling privileges or renewal fee, but city or town shall not charge any fee relating to the issuance or renewal of the sampling privilege.

Subsection L – Is amended to allow director to issue a series 10 license to a series 6 licensee at the same premises and if series 10 and series 6 are issued to the same premises they must be owned by the same licensee, and for the purpose of reporting liquor purchases all off-sale beer and wine sales are presumed to be purchased under the series 10 license.

A.R.S. § 4-207 Adds Subsection C.5 which allows location to be downgradedfrom series 9 to series 10 license if within 300 ft. of school or church, similar to upgrading from series 10 to series 9 provided for in Subsection C.3.

A.R.S. § 4-207.01 Subsection B is amended to allow the director to charge a fee until January 1, 2015, for the review of floor plans and diagrams submitted by an applicant for a change in a licensed premise.

A.R.S. § 4-210.01 Adds Subsection B authorizing the director to establish civil penalty in form of single payment or installments.

A.R.S. § 4-224 Is amended to prohibit city, town or county from adopting ordinances or regulations in conflictwith rules adopted pursuant to Title 4 and prohibiting them from limiting any right granted by license, Title 4 or rules adopted pursuant to Title 4. A city, town or county may enforce lawful zoning requirement, however, zoning shall not be a basis for protesting or denying a license.

A.R.S. § 4-229Subsection E is amended to allow licensee to post signsprohibiting fire arms on the premises in more than one location on the premises.

A.R.S. § 4-241 Subsection H.2 is amended by deleting the requirement of a signature when an electronic file or printed document is produced by a device that reads the persons age from the identification (Viage-type scanner or cash register scanner).

A.R.S. § 4-244 Subsection 3 is amended to allow distillers, brewers and wholesalers to donate up to $500 rather than $100 to federally tax exempt entities, per Section 501(C)(3), (4), (6) or (7) of the IRS code.

A.R.S. § 4-244.05 Subsection J.4 is amended to allow a director to charge a fee for inspectingunlicensed premises, pursuant to an application for exemption.

A.R.S. § 4-262 Is amended to change requirement to display liquor license in a conspicuous place from on-sale licensees only toall retail licensees.

A.R.S. § 9-500.06Old Subsection E is deleted which excluded cities or towns with populations of 100,000 persons or less. (They are now included.)

Added new Subsection E that provides the collection by a city or town of a fee or taxprohibited by A.R.S. § 9-500.06 is void and unlawful, and for five years following the unlawful collection the city or town shall reimburse the hospitality business for reasonable expenses incurred in collecting from the city or town any fees or tax unlawfully collected.

Section 20, Laws 2010, Chapter 85, Section 4 Is amended to allow the surrender of a series 6 used primarily for off-premise sales and receive a free series 9 changed from January 1, 2011 to January 1, 2012 (extra year), and providing that after January 1, 2012, usual renewal fees for replacement licenses shall apply.

Subsection C – Series 7 licensee may apply for a series 10 license and if applied for prior to January 1, 2012, no cost or fee shall be charged, however, after January 1, 2012, the usual renewal fees apply (old law had no expiration date for the free fee). Series 10 licensees having sampling privileges shall comply with the limitations set forth in A.R.S. § 4-206.01, Subsection J and the department shall indicate on the license the sampling privilege which is nontransferable.

Subsection D – Added, prohibiting a city, town or county from collecting any fee associated with issuance of supplemental licensing or sampling privileges issued pursuant to Section 4 (Paragraph A replaces 9s for 6 before January 1, 2012; issue 10 to 7 before January 1, 2012) and may not collect any fee associated with the original placement license.

Section 21 New fees collected by department are appropriated to department and must be collected in a nondiscriminatory manner.

Section 22 Department is exempted from rule making requirements of Title 41, Chapter 6, for the purpose of establishing new fees permitted by the act until July 1, 2015, but must provide public notice and opportunity for public comment at least 30 days before rules are adopted or amended.

Section 23 Provides that Section 4-206.01 as amended by Senate Bill 1460, is retroactive to and from December 31, 2010.

Guttilla Murphy Anderson has been serving its liquor clients since 1975, providing advice and representation concerning the full range of issues relating to the sale, manufacture, importation and distribution of spirituous liquors within the state of Arizona. Guttilla Murphy Anderson’s liquor clients include suppliers, wholesalers, distributors, importers and retailers, including international, national and local distillers, breweries, wineries, grocery stores, convenience markets, drug stores, restaurants and bars.